Should you Buy a House, Condo, or Town House?

When it’s time to buy a first home, many buyers confront the question: single-family house, or a unit in a multifamily town house or condo? Here is a more detailed look at how to decide whether to buy a house, town house or condo as a first home.

Prospective homebuyers have to consider many factors, including:

  • Location and lifestyle.
  • Maintenance costs.
  • Rules of ownership.
  • Lending and price.
  • Monthly fees.

Location is often the deciding factor. For young professionals who want to be close to the action, a short walk to restaurants, shops and a train station is a higher priority than having more space and a private yard. Town houses/condos that are in a few units are often chosen mostly based on its location. They usually are centered in the middle of things, such as restaurants, shopping centers, movie theaters and grocery stores.

First-time buyers may not have the confidence, skills or experience to take on a fully detached home with all of the upkeep. Those with many other responsibilities may not have time for home maintenance. Condos are also a convenient option for people who travel a lot.

A town house or condo may be a good fit for first-time homebuyers because association fees cover maintenance and repairs. Owners of single-family homes have to set aside money for those purposes. They are also preferable to those who don’t want as much homeowner responsibility, as they won’t have to hire landscapers and other contractors for exterior maintenance.

However, owning a condo or townhome is not for everyone. Among the reasons:

  • Owners associations can tell residents where to park, ban them from barbecuing on balconies, and otherwise impose restrictions.
  • Neighbors are close, and they can be annoying.
  • You are significantly more tied in value to your neighbors when it comes to condos and town homes.

Exterior renovations (and their budgets) have to be approved by the owners. And when other owners don’t pay their bills, you can be required to fork over more than your fair share and hope you’ll be reimbursed later.

Owners of condominiums and town houses have little control over annual fee increases.  Another downside is an unforeseen special assessment. If the condo building needs to do any major repairs that cannot be covered by the reserve fund, they will charge each owner a special assessment” on top of regular monthly fees. The money buyers pay for condo fees is not tax deductible and could be put toward a mortgage.

One thought on “Should you Buy a House, Condo, or Town House?

  • March 26, 2017 at 8:34 pm
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    I think you should choose the area you want to live in first, which will automatically narrow down your choices. For example, in Atlanta, if you want to live closer in the city, you’re probably going to be in a town house. You can’t just decide “I want a condo” or, “I want a house.” Decide the location, first.

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